Problemthe collins co has just gone public under a firm, Ask an Expert

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Problem:

The Collins Co. has just gone public. Under a firm commitment agreement, Collins received $20.56 for each of the 7.5 million shares sold. The initial offering price was $22 per share, and the stock rose to $26 per share in the first few minutes of trading. Collins paid $1,200,000 in legal and other direct costs and $250,000 in indirect costs.

Required:

Question: What was the flotation cost as a percentage of funds raised?

Note: Provide support for rationale.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91166519

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